A fierce debate over the allocation of Nigeria’s aviation revenue took centre stage at the House of Representatives Committee on Aviation on Thursday as the Nigeria Civil Aviation Authority (NCAA) and the Nigerian Airspace Management Agency (NAMA) presented opposing arguments on the proposed review of the sharing formula for the five per cent Ticket Sales Charge (TSC) and Cargo Sales Charge (CSC).
The public hearing, convened by the National Assembly, focused on proposed amendments to the Civil Aviation Act that could significantly alter the distribution of the statutory charges collected from airline ticket and cargo sales among aviation agencies.
While the NCAA urged lawmakers to retain and even increase its share of the fund to strengthen safety oversight, NAMA argued that its growing operational responsibilities and ageing infrastructure justify a larger allocation from the existing pool.
Daily Trust reports that the industry has been sharply divided since the National Assembly commenced a move to amend the Act.
Under the existing legislation, the NCAA collects five per cent TSC and shares among aviation agencies.
Under the extant sharing formula, the NCAA retains 56%; NAMA takes 22%; the Nigeria Meteorological Agency (NiMet) gets 9%, NCAT receives 7% while the Nigerian Safety Investigation Bureau (NSIB) gets 6 %.
But the proposal before the National Assembly seeks to slash the NCAA’s share to 40 per cent while NAMA’s 22% is jerked up to 40 per cent.
NCAA demands restoration of 65% of ticket sales
At the public hearing organised by the House of Representatives yesterday, the NCAA demanded the restoration of its original 65 percent share of the 5 percent ticket sales charge (TSC) and cargo sales charge (CSC).
Director-General of Civil Aviation, Capt. Chris Najomo, warned that reducing the agency’s allocation would weaken Nigeria’s aviation safety oversight and place the country at odds with international standards established by the International Civil Aviation Organization (ICAO).
Najomo stressed that the NCAA, as the nation’s independent aviation regulator, is responsible for certifying, inspecting and supervising airlines, airports, maintenance organisations, training schools, aviation personnel and the country’s air navigation service provider, NAMA.
According to him, unlike other aviation agencies, the NCAA does not generate significant commercial income because it performs sovereign regulatory functions aimed at ensuring public safety.
He disclosed that the five per cent Ticket Sales Charge accounts for about 83 per cent of the Authority’s funding, while all other regulatory fees contribute only 17 per cent.
‘The NCAA is Nigeria’s State Safety Oversight Authority. Our responsibility is to regulate every aviation service provider in the country in accordance with national laws and ICAO Standards and Recommended Practices,’ he said.
Najomo further revealed that Nigeria recently achieved an Effective Implementation score of 91.3 per cent during ICAO’s Coordinated Validation Mission, but recorded its weakest performance-just 50 per cent-in the area of financial resources available to support safety oversight.
He argued that cutting the NCAA’s funding would worsen the very deficiency identified by ICAO and undermine Nigeria’s ability to maintain global aviation safety standards.
The Director-General also cited increasing challenges in recruiting and retaining qualified aviation inspectors due to inadequate funding and poor remuneration, warning that safety oversight could be compromised if the Authority’s financial base is weakened.
He maintained that international best practice requires air navigation service providers such as NAMA to recover most of their operating costs through user charges paid by aircraft operators rather than passenger ticket charges.
According to him, NAMA already has about 16 statutory commercial revenue streams, including en-route navigation charges, terminal navigation charges, calibration fees, consultancy services and telecommunications services.
Others are over-flight and en-route international charges, domestic en-route charges, charges on Class B message charges, terminal navigation charges, sales of aeronautical information, among others.
He noted that these sources account for approximately 75 per cent of NAMA’s total revenue, while the Ticket Sales Charge contributes only about 25 per cent.
NAMA seeks 56%
However, Managing Director of NAMA, Engr. Farouk Ahmed Umar, presented a contrasting position, insisting that the current allocation no longer reflects the agency’s enormous operational responsibilities.
He explained that NAMA currently receives only 22 per cent of the statutory five per cent charge, translating to just N11 from every N50 generated through the levy on a N1,000 ticket or cargo sale.
Under the proposed amendment, the agency is seeking an increase to 56 per cent of the existing pool, insisting that the proposal would not raise ticket prices but merely redistribute the current revenue.
Umar said the agency’s operational costs have risen significantly over the years while navigation charges have remained largely unchanged since 2008 despite inflation, exchange rate volatility and increasing costs of maintaining modern air navigation systems.
He noted that NAMA is responsible for air traffic control, surveillance systems, navigation aids, communication infrastructure, aeronautical information services and continuous maintenance of safety-critical facilities across the country.
According to him, the agency also faces the urgent challenge of replacing ageing radar infrastructure under the Total Radar Coverage of Nigeria (TRACON) programme and investing in digital airspace management technologies.
The NAMA boss further sought legislative backing for the agency to receive 90 per cent of fees generated from obstacle evaluation and WGS-84 aeronautical surveys, arguing that while the NCAA issues Aviation Height Clearance Certificates, NAMA undertakes the specialised technical assessments that determine whether proposed structures constitute hazards to aircraft operations.
He assured lawmakers that NAMA supports strict accountability measures, including automated revenue collection, quarterly financial disclosures, annual independent audits and transparent procurement processes.
Umar also called for harmonisation of conflicting provisions in the Civil Aviation Act and the NAMA Act regarding the agency’s statutory share of the Ticket Sales Charge.
Ojikutu seeks rational review
Retired Group Captain John Ojikutu in his presentation called for a comprehensive review of the formula.
Ojikutu, a respected aviation security expert and industry analyst, argued that the existing revenue-sharing arrangement among the NCAA, NAMA, NCAT, NSIB and NiMet lacks a rational basis and requires urgent reassessment.
According to him, the allocation of the 5 per cent charges collected from commercial aviation operators should be guided by objective operational realities rather than a fixed percentage formula that does not adequately reflect the responsibilities and resource demands of each agency.
Ojikutu said a more equitable approach should consider key factors such as the number of aeronautical personnel employed by each organisation, the volume and sophistication of equipment deployed, the number of operational locations across the country, hours of operation and other relevant service obligations.
He explained that the charges paid by non-aeronautical operators are designed to support the continuous provision of essential aeronautical safety services required for the smooth operation of Nigeria’s aviation industry.
‘These services are not optional. They are mandatory requirements under the Nigeria Civil Aviation Regulations and are also part of Nigeria’s obligations to the International Civil Aviation Organization (ICAO) for both domestic and international air transportation,’ he noted.